Hematopoiesis, the regulated production of mature blood cells, is a complex scheme of multilineage differentiation which occurs mainly in the bone marrow of adult mammals. Mature cells are continuously produced from progenitor (or percursor) cells. Consequently, assays which detect these progenitor cells are vital in many research and clinical settings. The current assay procedures suffer from a number of shortcomings. First, they are carried out under suboptimal conditions which do not represent the in vivo environment. As a result, the assays are slow and the results may not be physiologically relevant. Furthermore, many current assay techniques do not ensure clonality, thereby precluding the harvest and study of the progeny of a single cell. Finally, most assays allow accessory cell interactions, and this often obscures the true action of the activity being assayed. These drawbacks can be overcome by the use of microencapsulation and rapid perfusion. We propose a Phase I study whose primary objective is to demonstrate that single progenitor cells can be grown out clonally in a microcapsule. If this ability is demonstrated, then a Phase II study would follow during which the detailed dynamics of outgrowth, including kinetics, lineage reconstitution, and expansion of immature hematopoietic cells, would be established. This assay would then be made available on a contract basis for growth factor screening, drug efficacy testing, toxicology studies and as a radiation assay.